Railsr Agrees To Sell To Investors In A Rescue Sale

Embedded banking platform Railsr was saved from going out of business after a group of investors led by D Square Capital agreed to buy it. No one said what the deal was for.

Moneta VC and Ventura Capital joined D Square Capital in buying and re-capitalizing Railsr. Railsr will now do business as Embedded Finance Limited, while the old company will be put into administration.

The Financial Conduct Authority has agreed to the change of control, which Railsr says will keep business going for its customers and more than five million end-users. The firm’s main office will stay in the City of London.

The deal includes Railsr’s embedded finance platform and business as a service (BaaS), as well as a number of its subsidiaries, such as PayrNet, which is regulated in the UK.

Rick Haythornthwaite, who is still the chair of Railsr, says: “A lot of people in the financial world think Railr has a lot of potential and have worked very hard to make this transaction happen. Now, we’ll get back to the basics and run the business in a methodical and helpful way. We got Railsr a new chapter, and we’re excited to see what comes next.”

Railsr has been looking for a buyer for a few months as the economy has gotten worse. A possible deal with Flutterwave, an African payments technology company that is a leader in its field, fell through.

A year ago, the company was looking for investment at a value of $1 billion. In October, it finally got money, but at a much lower value of $250 million.

The FCA is also auditing Railsr’s UK branch, and its Lithuanian branch is being looked into because of concerns that it has “grossly and consistently” broken money laundering and terrorist financing laws.